BAFT / ABA Separation: Frequently Asked Questions

1. How will this affect BAFT’s mission and focus?

BAFT will remain focused on providing thought leadership, best practice guidance, advocacy and education across the global transaction banking community. We do not expect an immediate change in mission, however, as an independent entity, we will have greater freedom to respond to desired changes from our global membership. Once BAFT has been re-established as an independent entity, the board of directors will review the association strategy and mission and adjust accordingly. Strategy reset has been our normal practice every few years.

2. Who will be responsible for oversight of BAFT?

The BAFT Board of Directors will have oversight responsibility for BAFT as it has previously.  However, it will assume additional responsibility for audit, compliance, and other oversight functions that was previously handled by the ABA.

3. What will be the new governance structure of the organization?

BAFT will be governed by a global board of directors and led by a CEO, as it is currently. The current board of directors are in the process of considering revisions to the board member eligibility and elections process to be fit for purpose in the independent structure.  Similarly, individual board members’ responsibilities are under review and will be outlined prior to the actual separation date.

4. What will be the impact on membership services?

We expect daily member engagement as a result of this transition to be largely unchanged. Committees, councils and working groups will continue to meet, events will continue to be held, and advocacy will be conducted as normal. There will be some changes in communications, legal agreements and payment accounts as back-end systems are transitioned.  Some non-US institutions that may currently receive member benefits from ABA (e.g. discounts on ABA events and training), solely as a function of their membership in BAFT, are likely no longer going to receive those extended benefits from ABA. Once the transition to an independent state has been completed, the association will reassess the mix of services and capabilities (based on member feedback) and adjust accordingly.

5. How will this impact the geographic representation of membership?

BAFT has grown increasingly more globally diverse, and we expect that to continue. That is a major consideration for the strategic decision to separate, providing a level of independence and neutrality.  We will continue to ensure proper representation of all geographies and institution types in our boards and councils.

6. What will be the impact on membership dues?

The association has historically conducted a review of membership dues every 2-3 years and adjusted for inflation, expanded operations and services costs, and we anticipate continuing that practice. We are not planning a change in dues specifically because of this separation.

7. What is the financial risk to BAFT of becoming independent?

The BAFT Board highly considered the financial risk associated with becoming an independent entity, particularly in the wake of the pandemic, which created immense disruption to BAFT revenue sources.  We analyzed cash flows during normal operations and from the pandemic, and targeted a comfortable buffer which we believe will allow BAFT to withstand similar financial disruptions in the future.

8. How will this impact BAFT’s ability to conduct advocacy?

BAFT will continue to conduct advocacy on a global basis as it has done previously.  A key driver for the decision to become independent is to enable BAFT to advocate for its diverse global membership without any perceived conflicts of interest based on geopolitical alignment. We will continue to collaborate with various organizations on common advocacy topics as appropriate.

9. Will BAFT and ABA continue to collaborate on policy issues in the US?

Yes.  BAFT has and expects to continue to collaborate with ABA and other industry associations on policy issues of mutual interest to our members.

10. Will BAFT establish regional offices outside of the US?

Immediately following the separation, BAFT will remain a Washington, DC headquartered association.  We currently utilize regional consultants to support activity outside of the US and will continue to do so.  The BAFT Board of Directors will consider establishing official legal entities outside of the US in the future as the need or opportunity arises, however, the benefits to members would need to outweigh the costs.

11. Will the billing process be impacted?

BAFT will establish its own accounts, so payment instructions will change. We expect the billing cycle for membership dues and sponsorships will remain the same.

12. Will operational costs increase because of losing benefits of scale being within ABA?

In our preliminary assessment, we believe the operational costs will be comparable. We have selected a solution provider that will replace the various services currently received from the ABA and are finalizing the transition costs.  The underlying systems and services used by BAFT will change, and line item costs will vary, but we expect the total costs to be comparable. We expect to have a better estimate of post-separation costs once the transition details have been finalized over the next few months.

13. How will this affect contracts (sponsorship) with BAFT?

Going forward, all contracts will be conducted as BAFT [instead of ABA].  We will assess when an appropriate cut-over is, which may be in advance of the actual separation date.  Other long-term contracts will be examined and re-papered if necessary.